Specialty drug users may feel co-pay pain

The Affordable Care Act might not make care much more affordable for some Californians who need expensive prescription drugs to treat chronic illnesses or just to stay alive.

The health plans to be marketed in the California insurance exchange, established under President Barack Obama's health reform law, will follow the lead of Medicare and a growing number of commercial insurers by charging co-insurance payments ranging from 10 to 30 percent on a number of high-cost "specialty" drugs. These include medicationsfor treating rheumatoid arthritis, multiple sclerosis, hepatitis C, breast cancer, leukemia and other conditions.

Advocates for the sick are unhappy that Covered California has decided to adopt this model, which imposes much higher costs on many patients than more traditional policies that offer the drugs for a flat co-payment.

"It's disappointing that the state is in a way institutionalizing what we believe is a practice that harms those who are in the greatest medical need," says Lisa Nelson, director of state government affairs for the Leukemia and Lymphoma Society.

Whether sick patients would be financially worse off in the exchange depends on their current insurance coverage – and on which of the four basic exchange plans they choose, since each has different premiums, co-insurance levels and annual caps on patient out-of-pocket spending.

Covered California's spokesman, Dana Howard, said the exchange officials had to balance several important factors, and in the end they believed the decisions they made were "the most feasible way to provide health plans that are affordable both in terms of premiums and cost sharing." He noted that lower-income people, who would be most affected by the high drug costs, are also the ones who will benefit the most from subsidies intended to reduce their premiums and out-of-pocket costs.

Sonja Radovic, a 45-year-old working mother of two who was diagnosed with breast cancer five years ago, would not qualify for any of those subsidies. She said her expense for Feraston, a hormonal drug, could skyrocket by as much as 10 times should she ever need to buy coverage through the exchange – from the current $860 a year to $8,600 under the plan with the lowest premium.

She is confident that her employer, a small business with 11 employees, will keep its current coverage, though that could conceivably change should the economy sour again. "What part of 'Affordable' are they not understanding?" Radovic asks. "And that's just on one drug. What about other even more expensive specialty drugs?"

Feraston is far from the most expensive medication. The average cost of treating a variety of cancers with one of five specialty drugs is $3,682 per month, or $44,184 a year, according to Express Scripts, the giant St. Louis-based pharmacy benefit-management company. For multiple sclerosis, the average cost is $3,584 per month, and for hepatitis C the monthly price tag is $3,284.

Kalydeco, the only effective therapy for cystic fibrosis, can carry a price tag of up to $180,000 per year, says Suzanne J. Tschida, a vice president at Optum RX, a Minnesota-based pharmacy benefit-management company whose main operations are in Irvine.

In 2012, specialty drugs accounted for 24.5 percent of all U.S. prescription drug spending, even though less than 2 percent of the population is affected by the related illnesses, according to Express Scripts.

Still, if you are one of the unlucky 2 percent and you're paying 20 or 30 percent of even the somewhat-less-stratospherically-priced drugs, it could quickly overwhelm your household budget. For plans in Covered California, the amount patients must pay out of their own pockets each year before their insurers will cover 100 percent of their medical expenses is as high as $6,350 for individual plans and $12,700 for family plans.

"I think it shows that these benefits designs essentially discriminate against people who have these serious illnesses," says Dan Mendelson, CEO of Avalere Health Inc., a Washington, D.C.-based medical data company.

An Avalere study showed that when monthly out-of-pocket payments hit $100, 10 percent of patients stopped filling their prescriptions. At $500 a month, 25 percent stopped. That can lead to sicker patients and an even greater financial burden on the health care system down the line, many observers argue.

Not everybody buying coverage in the exchange will be affected equally. In Covered California's second least-expensive plan, individuals with incomes between $15,856 and $22,980 will face much lower co-insurance payments, reduced or no deductibles and an out-of-pocket maximum of just $2,250. Howard acknowledges that it might still be "a strain" for those people to cope with their medical expenses, but "we think this $2,250 annual limit on their payments will help many avoid bankruptcy."

FILE PHOTO, ORANGE COUNTY REGISTER
Joan W. Clements, 70, of Costa Mesa was diagnosed with chronic myeloid leukemia nearly 12 years ago. She credits Gleevec as keeping her alive, but might become one of the specialty drug users to feel the pain of the Affordable Care Act. CINDY YAMANAKA, ORANGE COUNTY REGISTER
Joan W. Clements of Costa Mesa is hopeful about the cure, drugs and new treatment to help fight her chronic myeloid leukemia. She is less certain about what the Affordable Care Act might mean for her medical future. CINDY YAMANAKA, ORANGE COUNTY REGISTER
Six months of explanation of benefits for Joan W. Clements pile up quickly. The Costa Mesa resident was diagnosed with chronic myeloid leukemia nearly 12 years ago. Her husband Jerry, who has diabetes, manages the medical bills. He change from a PPO to an HMO to help offset his wife's medical costs. CINDY YAMANAKA, ORANGE COUNTY REGISTER
Joan W. Clements, 70, of Costa Mesa has filled her Costa Mesa home with "hope," her favorite word. "Hope" is in the garden, bathroom, fireplace, foyer and more. CINDY YAMANAKA, ORANGE COUNTY REGISTER
Proactive notes written by Joan W. Clements, a chronic myeloid leukemia survivor, have lined the kitchen walls of her Costa Mesa home for more than six months. CINDY YAMANAKA, ORANGE COUNTY REGISTER
Jerry Clements of Costa Mesa brings his wife coffee in bed every morning since her diagnosis of chronic myeloid leukemia nearly 12 years ago. He also manages the complex maze of medical bills for her condition. CINDY YAMANAKA, ORANGE COUNTY REGISTER

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